A History of Macroeconomics from Keynes to Lucas and Beyond

This book retraces the history of macroeconomics from Keynes''s General Theory to the present. Central to it is the contrast between a Keynesian era and a Lucasian – or dynamic stochastic general equilibrium (DSGE) – era each ruled by distinct methodological standards. In the Keynesian era the book studies the following theories: Keynesian macroeconomics monetarism disequilibrium macro (Patinkin Leijongufvud and Clower) non-Walrasian equilibrium models and first-generation new Keynesian models. Three stages are identified in the DSGE era: new classical macro (Lucas) RBC modelling and second-generation new Keynesian modeling. The book also examines a few selected works aimed at presenting alternatives to Lucasian macro. While not eschewing analytical content Michel De Vroey focuses on substantive assessments and the models studied are presented in a pedagogical and vivid yet critical way.